I have a good friend who invests in thirty to forty stocks. These are businesses that he knows well and believes will generate attractive long-term returns. In choosing his stocks, he is conscious of diversification but not in some pseudo-scientific way based on stock price correlations. While he broadly identifies as a value investor, this just means that he wants to own businesses at prices lower than his credible estimate of their value. In the roughly twenty-five years that he’s been investing, he has performed moderately better than the global stock index. Of course, this is positive and compounded over…

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